1. Chapter 1
Organizational Performance:
IT Support and Applications
1 Chapter 1

2. Learning Objectives
 Describe the digital economy and digital
enterprises.
 Recognize the relationship between performance,
organizational pressures, and responses and
technology.
 Define IS and IT.
 Understand what the adaptive enterprise is ?
 Understand the support role that IS and IT play in
the organization.
 Understand the importance of learning about IT.
2 Chapter 1

3. Doing Business in the Digital
Economy
 Conducting business in the digital economy
means using Web-based systems on the
Internet and other electronic networks to
do transactions electronically.
3 Chapter 1

4. Digital Enterprise
 Digital enterprise is a new business model that
uses:
 IT in a fundamental way to accomplish one or
more of three basic objectives:
 Reach and engage customers more effectively,
 Boost employee productivity,
 Improve operating efficiency
4 Chapter 1

5. Digital Enterprise
 Uses converged communication and
computing technology to improve business
processes.
 A digital enterprise used networks of
computers to e-connect:
 all its internal parts via an intranet.
 all its business partners via the Internet
or Extranet.
5 Chapter 1

6. Digital Economy
 Digital Economy refers to an economy that
is based on digital technologies.
 Sometimes called the Internet economy, the
new economy, or the Web economy.
 Is a convergence of computing and
communication technologies on the
Internet and other networks, and the
resulting flow of information and
technology that is stimulating electronic
6 transactions and vast organizational
Chapter 1

7. Digital Economy – “New” Economy
 E-Business: The use of electronic technologies to transact
business
 Collaboration: People and Organizations interact,
communicate, collaborate, and search for information
 Information Exchange: Storing, processing and transmission
of information
7 Chapter 1

8. Digital Business
8 Chapter 1

9. Major IT characteristics in the
DE
 Globalization
 Digital systems
 Speed
 Information overload
 Markets
 Digitization
 Business models and processes
9 Chapter 1

10. Major IT characteristics in the
DE
 Innovation
 Obsolescence
 Opportunities
 Fraud
 Wars
 Organizations
10 Chapter 1

11. Opportunities for
Entrepreneurs
 Provides un-parallel opportunities
 Create “dot-com” companies from inception
 Apply EC business models to different
business areas
 Sell products online
 Online medical advise
 Secured e-payments
11 Chapter 1

12. E-Commerce and Network
Computing
 Infrastructure for digital organization and
EC is made up of:
 Networked computing (distributed
computing) which connects computers
and other e-devices via telecommunication
networks.
12 Chapter 1

13. -cont..
 Standalone computers or networks
confined to single location use multiple-
location networked computers connected
to the global networked environment
known as Internet.
 Internet’s counterpart within an
organizations, are called an Intranet.
 Some link intranets to their business
partners over networks called Extranets
13 Chapter 1

14. Major capabilities of CIS
 CIS = Computerized Information Systems
 Perform high speed, volume and
numerical computations.
 Provide fast, accurate, reliable, and
inexpensive communication within and
between organizations, any time any
place.
 Store huge amounts of information in an
easy-to-access, yet small space.
14 Chapter 1

15. -cont…
 Allow quick and inexpensive access to
vast amounts of information world wide
at any time.
 Enable collaboration anywhere, anytime.
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16. Major capabilities of CIS
 Increase the effectiveness and efficiency of
people working in groups in one place or in
several locations.
 Vividly present information that challenges
the human mind.
 Facilitate work in hazardous environments.
 Automate both semiautomatic business
processes and manually done tasks.
 Facilitate global trade.
16 Chapter 1

17. Major capabilities of CIS
 Enable automation of routine decision
making.
 Facilitate complex decision making.
 Can be wireless, thus supporting unique
applications anywhere.
 Accomplish all of the above much less
expensively than when done manually.
17 Chapter 1

18. The Old Economy – Taking Photo’s
1. Buy film in a store
2. Load your camera
3. Take pictures
4. Take roll of film to store for processing
5. Pickup the film when ready
6. Select specific photos for enlargement
7. Mail to family and friends
18 Chapter 1

19. The New Economy – Taking Photo’s
 1st Generation Digital Photography
 Old economy (except 6 and 7) were replaced by using
a scanner and emailing
 2nd Generation Digital Photography
 Use a Digital Camera, no film, no processing
 3rd Generation Digital Photography
 Your Digital Camera is now in your mobile phone,
your binoculars, or palmtop computer.
19 Chapter 1

20. The Global Platform of the New
Economy
 A huge number of digitizable products; that is
products that can be converted to digital format.
Most common are: books, movies, magazines, TV
and radio programming, electronic games, music
CDs, and computer software.
 Consumers and firm conducting financial
transaction digitally.
 Physical goods such as home appliances and
automobiles that contain embedded computer
chips and connectivity capabilities.
20 Chapter 1

21. Electronic Business
 Businesses increasingly perform their basic
functions: buying and selling goods and services,
servicing customers, and collaborating with
business partners electronically
 This process is known as electronic business (E-
business) or electronic commerce (E-
commerce)
21 Chapter 1

22. New Economy vs. Old Economy
Example Old New
Buying and selling textbook Visit the bookstore Visit web site for publishers
and retailers
Registering for classes Walk around campus to Access campus web site
Departments, Registrar’s
office, etc.
Photography Buy film, use camera, take Use digital camera
picture, take it for processing
Paying for Gasoline Fill up your car, go inside, pay Use speed pass token; wave
cash or credit card over the sensor and go
Paying for Transportation Pay cash, metal tokens Metro cards electronic cards
Paying for goods Visit store, select item, pay, go Use self-service kiosks
Supplying commercial photos Use newspapers, paper, Use hub-like supply chain with
catalog, or online digitized picture
Chapter 1 22

23. Business Models
 A business model is a method of doing business by which a
company can generate revenue to sustain itself. The model
spells out how the company adds value to create a product or
service. (Value Chain)
 Nokia makes and sells cell phones
 A TV station provides free broadcasting. Its survival depends on a
complex model involving advertisers and content providers
 Internet portals, such as Yahoo, also use a complex business model.
23 Chapter 1

24. Digital Age Business Models
 Name-Your-Own Price
 Reverse Auctions
 Affiliate Marketing
 E-Marketplaces and Exchanges
 Electronic aggregation (buying groups)
24 Chapter 1

25. Drivers Forcing Changes In Business
Models
Business Pressures
 Environmental, organizational, and technological
factors
 React frequently and quickly to both the threats and the
opportunities resulting from this new business
environment
Business Critical Response Activities
 A response can be a reaction to a pressure already in
existence, an initiative intended to defend an
organization against future pressures, or an activity
that exploits an opportunity created by changing
conditions
25 Chapter 1

26. The Drivers of Change (Continued)
Chapter 1 26

27. Business Pressures, Organizational
Responses, and IT Support
 Business Pressure - The business environment is
the combination of social, legal, economic,
physical, and political factors that affect business
activities
 Significant changes in any of these factors are
likely to create business pressure on the
organization
 The three types of business pressures faced are:
market, technology, and societal pressures.
27 Chapter 1

28. Three Types of Business
Pressures
 Market Pressures:
 The Global Economy and Strong Competition
 The Changing Nature of the Workforce
 Powerful Customers
28 Chapter 1

29. Business Pressures (Continued)
 Technology Pressures:
 Technological Innovation and
Obsolescence
 Information Overload
29 Chapter 1

30. Business Pressures (Continued)
 Societal Pressures:
 Social Responsibility
 Government Regulation and Deregulation
 Protection Against Terrorist Attacks
 Ethical Issues
30 Chapter 1

31. Organizational Responses
 Strategic Systems provide advantages that
enable organizations to increase market share
and/or profits, better negotiate with suppliers, or
prevent competitors from entering their markets
 Customer Focus is the difference between
attracting and keeping customers by providing
superb customer service and losing them to
competitors
31 Chapter 1

32. Organizational Responses
(Continued)
 Make-to-Order is a strategy of producing
customized products and services
 Mass Customization is producing a large
quantity of items, but customizing them to fit the
desire of each customer
 E-business and E-commerce is the strategy of
doing business electronically
32 Chapter 1

33. What is an Information System?
 An IS is a system that collects, processes, stores,
analyzes and disseminates information for a specific
purpose.
 An IS includes :
 Inputs(data, instructions)
 Outputs (reports, calculation)
 Process
 Feedback
33 Chapter 1

34. Information System
34 Chapter 1

35. Formal and Informal IS
 Formal systems include agreed-upon
procedures, standard inputs, outputs and
fixed definitions.
 Informal systems may be in any form or
shape, ranging from an office gossip
network or group of friends exchanging
letters electronically.
35 Chapter 1

36. What is a CBIS?
 Computer Based Information System.
 CBIS is an IS that uses computer
technology to perform some or all of its
intended tasks.
 Can include PCs and software.
 1000s of varying sized computers, printers,
plotters, networking devices and databases.
36 Chapter 1

37. Business Information System
37 Chapter 1

38. Components of CBIS
 Hardware
 Software
 Database
 Network
 Procedures
 People
 Purpose
 Social Context
38 Chapter 1

39. What is an Information
Technology?
 IT is the collection of computing systems
used by an organization.
 It refers to the technological side of an
information system.
 IT includes:
 Hardware, software
 Databases, networks and
 Other Electronic devices
39 Chapter 1

40. Why Should You Learn about
Information Technology (IT)?
 IT is essential for work in organizations
 IT will reduce the number of middle managers
 IT will change the manager’s job
 IT impacts employees at work
 IT impacts employees’ health and safety
 IT is used by all departments
40 Chapter 1

41. Why Should You Learn about IT?
(Continued)
 IT provides opportunities for people with
disabilities
 IT provides quality-of-life improvements
 Improvements in health care
 Crime fighting and other benefits
41 Chapter 1

42. Managerial Issues
 Recognizing opportunities for using IT and Web-
based systems.
 Who will build, operate, and maintain the
information systems. How much IT?
 How much and HOW important is IT?
 Is the situation going to change?
 Globalization.
 Ethics and social issues.
 Transforming the organization to the digital
economy.
42 Chapter 1